Retirement: What you need to know

What do employers need to consider regarding retirement? The federal Employee Retirement Income Security Act (ERISA) and the requirements of the Social Security and Medicare systems are the major laws that affect the retirement process. In addition, the federal Age Discrimination in Employment Act (ADEA) necessitates that the entire retirement process be monitored to avoid age discrimination.

With individuals over age 65 becoming a larger segment of the population, their financial needs in retirement are a major national issue. Preretirement planning is crucial assistance that can help retirees achieve financial security. The aging of the workforce, along with financial issues from the economic downturn, are resulting in employees delaying retirement, returning to work after retirement, or using phased retirement.

Employers must pay close attention to the following issues:

Age discrimination. Federal law prohibits discrimination against persons aged 40 and over. Almost all mandatory retirement requirements are illegal.

Benefits. No employee benefit plan may cease pension accrual or suspend plan contributions for an employee because of age.

Healthcare insurance. Employers must allow employees who lose their group health insurance because of termination to continue their healthcare coverage at their own expense.

Hiring. Job applicants seeking to return to work cannot be discriminated against because they are retired.

Medicare. Employees should apply for Medicare coverage three months before the month in which they reach the age of 65 to ensure that coverage begins promptly.

Employer-sponsored health plans must disclose to all individuals eligible for the Medicare Part D drug benefit who ...